Pythia Cap
Equity Investing & Market Satire
Thermo Fisher trading back at roughly Liberation Day multiples doesn't make much sense. Its guide was only 'down' against expectations that had grown too high at 25x earlier this year, after the stock re-rated once Liberation Day fears proved too pessimistic about the actual tariff, NIH and pharma-pricing impact. The other explanation is that an inflation shock is bad for long-duration assets. x.comÂ
Iambic's R&D split and the basket's returns show why data-generating lab work matters more than compute in applied AI biotech. Iambic's S-1 puts about 8 cents of its 2025 R&D dollar into compute, 31 into discovery and the lab, and 28.5 into the clinic. After two months, the basket rose 20.5% versus -0.2% for the S&P 500 and -4.8% for biotech. Data-producing names rose 33.5%, or 16.8% without Moderna's readout day, versus 9% for bioprocess and reagents. The market bought the data. x.comÂ
Danaher's AI-driven life-sciences expectations look excessive against its results. After a 44% rise since May on hopes AI would lift life sciences to unprecedented levels, it missed Q3 revenue and guided Q4 growth to just 4-5%. x.comÂ
Thermo Fisher is too expensive to own at 26x next-twelve-month EPS with earnings growing only 10%. That is a 2.6x PEG ratio, not as stretched as FICO or Intuitive Surgical at their highs, but still no chance worth owning. @mathlonning, in the thread being answered, calls the valuation unsustainable. x.comÂ
Biotech, including Thermo Fisher, Eli Lilly, Intellia, CRISPR, Illumina and NeoGenomics, stands to gain as AI-trade capital rotates out of infrastructure, since healthcare is the largest market AI has yet to disrupt. AI hardware is worth about $14 trillion versus $1.4 trillion for biotech, so a 2.5% rotation could, at 5x inelasticity, put $1.75 trillion of pressure on biotech. Capital isn't leaving the AI trade; the equal-weighted S&P 500 is at all-time highs. x.com x.comÂ
Johnson & Johnson's valuation does not make sense at a premium to Thermo Fisher and roughly flat to Danaher. @PythiaR, replying, calls J&J a clean story with limited patent-loss risk until the 2030s and a strong pipeline, but expensive at 22x, and prefers medtech such as Stryker. Pharma may simply have been easier to own than medtech given OBBB payer eligibility changes and hospital procedure volume risk, while life sciences has disappointed. x.comÂ
The bioprocessing recovery and AI acceleration story for Danaher and Thermo Fisher is failing, as demand for their lab equipment turns out to be weaker than hoped. A real recovery looks more like a calendar 2027 event. x.com x.comÂ
High-quality healthcare companies such as Thermo Fisher, Boston Scientific, Novo Nordisk and Abbott now trade at washed-out multiples, which may make the space one of the cheapest pockets of the market on a quality-adjusted basis while SaaS draws the attention. x.comÂ
Danaher's rebound looks like one to fade near $190 because bioprocessing, its bigger business, delivered disappointing sales and guidance. Weak trading in peers, with Repligen also lower, echoed that. A move from $165 to $190 in two days seems off; the initial flush may have been overdone, but it is hard to argue Danaher deserves to trade back at $200, where it entered earnings, after that bioprocessing commentary. x.comÂ
